What is IOT? How does it work? – Forbes Canada advisor

What is IOT?  How does it work?  – Forbes Canada advisor

IOTA is a smart contract platform designed to handle payments and other transactions between physical devices that are connected to the Internet. MIOTA is a cryptocurrency token used by the IOTA platform to facilitate transactions.

What is IOT?

Even if you haven’t heard of the Internet of Things (IoT), chances are you already have IoT devices in your home, car, or office. These might include the sensors in your car that indicate low tire pressure, or your Internet TV, smart fridge, or Nest thermostat.

As the name suggests, IoT devices are connected to the Internet, usually through Wi-Fi or a cellular network. But despite its ubiquity, facilitating transactions and payments between IoT devices is a challenge. IOTA is a ledger designed to boost microtransactions between IoT devices.

“In reality, we see the IOTA token as the connective tissue between the human economy and the machine economy, creating interoperability between the two,” says Dan Simerman, head of financial relations at the IOTA Foundation.

Another way to describe IOTA is as a network that helps investors and companies monetize IoT data sources. MIOTA is the cryptographic token that is used to facilitate transactions on the IOTA network and is also used as a reward for network participants and supporters.

How does IOTA work?

Unlike other cryptocurrencies like Bitcoin, IOTA is based on a distributed ledger technology that is somewhat different from the blockchain. IOTA uses a proprietary technology called the Tangle, which is a consensus algorithm that requires users to validate two transactions in order to complete their own IOTA transactions.

Technically speaking, Tangle is a direct acyclic graph (DAG) consensus algorithm. With this method, there are no miners or validators, no blocks and no transaction fees. This allows crypto to “overcome the cost and scalability issues of the blockchain,” according to the IOTA website.

The DAG framework was designed to eliminate the scalability issues and costs associated with blockchain by allowing fee-free payments, lower computing costs, and the ability to connect to IoT devices.

IOTA’s structure is attractive for use in the IoT economy because it removes the friction of high transaction costs, which would require human supervision and intervention, precisely what IoT was designed to avoid.

This “smart contract” platform is currently in the process of redesigning its ledger technology and consensus protocol. IOTA version 2.0 is completely decentralized.

Advantages of IOTA

  • No transaction fees. With IOTA, there is no need to pay gas (as with Ethereum) or reward miners (as with Bitcoin) to complete transactions. Lacking miners or validators, IOTA is a free data and value transfer protocol.
  • Faster transactions. Conventional blockchains often experience bottlenecks due to the time it takes to create new blocks. The Bitcoin blockchain can handle approximately five transactions per second (TPS), although this can vary at times. For Ethereum, it is normally around 15 TPS. For IOTA, it is possible for your network to handle up to around 1000 TPS.
  • Efficient energy. IOTA is designed to accommodate devices like sensors that operate in a low-energy environment. Even IoT devices with minimal computing power, such as toasters, can write data to the IOTA Tangle.
  • Adaptable to different use cases. Large corporations can adapt IOTA for individual use cases. With IOTA Access, an open source framework that enables access to control systems, a car owner can let someone remotely access their vehicle, for example.
  • Decentralization roadmap. IOTA version 2.0 is completely decentralized.

Disadvantages of IOTA

  • Security vulnerabilities. In February 2020, hackers stole MIOTA worth more than $1.5 million. It is reported that the hackers appeared to have targeted some high net worth accounts, with IOTA founder David Sønstebø agreeing to pay the victims of the attack with the network’s tokens. The new and improved version 2.0 of IOTA aims to improve security issues.
  • Ability to grow. The IOTA system is still in its infancy. Like many cryptocurrencies, success depends on wider adoption of the network with a larger number of participants.

How to buy IOTA

It is key to understand that IOTA is the overall platform, while MIOTA is the crypto token that powers the IOTA system. Listed under the ticker MIOTA, the IOTA cryptocurrency is available on a variety of cryptocurrency exchanges.

You cannot buy MIOTA directly in Canada, but you can purchase it indirectly. First, you’ll need to sign up for an account with a local Canadian-based crypto exchange, such as Shakepay, Coinberry, Newton, Netcoins, or Coinsmart, and then you’ll need to transfer Canadian dollars to your exchange account to buy a dollar-pegged stablecoin. like Tether (USDT). Once you have Tether, transfer it to a global exchange account from a MIOTA provider like Binance or Bitfinex (except in Ontario, where both exchanges ceased operations due to a regulatory crackdown from the Ontario Securities Commission) and use the stablecoin to buy MIOTA.

Here’s how to buy IOTA, step by step from a global crypto exchange that offers it:

1. Sign up for an account and get verified

If you don’t already have an account with the crypto exchange of your choice, you’ll need to register and enter some basic information, then verify your identity to help prevent fraud. Most platforms require you to upload your photo ID for verification, which may take a few days.

2. Set up a crypto wallet

Once verified, you are ready to buy or trade cryptocurrencies. While you can store them on the exchange, this can make your coins vulnerable to loss or theft. Setting up a crypto wallet is a safer way to store your coins and keep them safe. There are many wallet options available and they come in different forms. The IOTA Foundation, for example, offers a wallet called Firefly to store IOTA tokens.

3. Deposit your cryptocurrency

Login to your exchange account and deposit your cryptocurrency into your wallet. This should only take a few minutes.

4. Buy your chips

Now you are ready to buy. Simply find the pair that matches your cryptocurrency (IOTA/BTC, when buying with Bitcoin, for example) and enter the amount of IOTA you want. Click “Buy” to complete the transaction, and IOTA is all yours.

Should you buy IOTA?

While IOTA and the explosion of IoT technology look promising, there are no guarantees that it will have as bright a future as current predictions might lead you to believe. Many unpredictable external events could influence the direction of IOTA, from a huge cryptocurrency sell-off to a recession and subsequent market crash.

Although the long-term outlook appears to be positive for IOTA, it is important to recognize that the fear of missing out can cloud an investor’s judgement. Cryptocurrency is a volatile investment, so be aware that you could lose the money you invest.

But if you are passionate about IoT technology and understand the underlying risks, IOTA may be an option worth considering for a small portion of a crypto portfolio. Consider consulting a financial professional before investing.

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